- Vodafone’s sales rose by 5% to €9.8bn in the three months ending December
- Three UK and Vodafone expect to finalise their merger in the next few months
Strong UK mobile and broadband sales ahead of Vodafone’s megamerger with ThreeUK helped offset a sharp slowdown in the group’s key market of Germany at the end of 2024.
The FTSE 100 firm revealed turnover rose by 5 per cent to €9.8billion in the three months ending December on the back of stronger results across Africa, the UK and Turkey.
Overall UK sales expanded by 7.2 per cent to €1.9billion, as sterling appreciated against the euro and Vodafone scored faster growth in mobile and fixed service revenues.
Organic services revenues soared by 11.6 per cent in Africa, thanks to growth in all of Vodacom’s international markets, including Egypt and South Africa, where it benefited from higher prices and customer numbers.
Overall services turnover in Turkey nearly doubled to €776million, mainly due to the company significantly upping mobile tariffs in response to hyperinflation.
The three markets helped offset a much weaker performance in Germany, where Vodafone’s service revenue shrank by 6.4 per cent.
The group’s German division – its biggest market – has seen price hikes drive away broadband customers, while new laws preventing landlords from selling television in bulk to apartment blocks has also hit trade.
Margherita Della Valle, chief executive of Vodafone, said: ‘We are continuing to invest in the turnaround of our German business, and we are starting to see improving customer trends, although conditions have become more challenging in the mobile market.’
Nonetheless, Vodafone still expects its adjusted earnings before nasties to equal approximately €11billion for the 2025 financial year.
It also plans to go ahead with the final €500million of a €2billion share buyback programme begun last May.
It repurchase up to €2billion more shares once the current scheme is completed, funded by the €8billion sale of its Italian business to Swisscom.
Since Della Valle took over in 2023, the firm has sold multiple international divisions to try and streamline operations and cut its massive debt pile.
Along with its Italian arm, Vodafone has sold its Spanish, Hungarian, and Ghanaian segments, as well as stakes in phone masts providers Indus Towers and Vantage Towers.
The London-based company is also close to completing the mega-merger of its UK operations with telecoms giant Three, having recently gained the green light for the deal from the Competition and Markets Authority.
Once the agreement is finalised, which Vodafone anticipates happening in the next few months, the enlarged business will become the UK’s biggest mobile operator, with around 27 million customers.
Vodafone and Three UK have vowed to spend £11billion over the next decade building a combined 5G network across the UK.
Due to concerns about mobile users paying higher bills, the pair have promised to cap their lowest-cost mobile plans at £10 for two years.
‘When the UK merger completes in the next few months, we will have fully executed Vodafone’s reshaping for growth,’ said Della Valle.
Mark Crouch, a market analyst at eToro, warned ‘challenges remain for Vodafone’, which needs ‘to come up with something other than asset sales and price hikes if they are ever to recapture their former glory’.
Vodafone Group shares shrank 7.2 per cent to 65p on Tuesday morning, making them the FTSE 100’s biggest faller.
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